Healthcare Coding Series: CPT & HCPCS

Intro to Healthcare Coding Series: CPT & HCPCS blog post

CPT (Current Procedural Terminology) is a standard coding system used to describe medical procedures and services provided by healthcare professionals. It is likely to be among the most recognizable code set to healthcare providers and professionals. CPT was first developed in 1966 by the American Medical Association (AMA). The AMA recognized the need for a standardized coding system to describe medical procedures and services provided by physicians and other healthcare providers.  

The initial version of the CPT code included approximately 3,500 codes, which were organized into three sections: Evaluation and Management, Anesthesiology and Surgery. Over the years, the code set has been expanded and updated to reflect changes in medical technology and practice. Today, the CPT code is used by healthcare providers, payers and other entities to report and reimburse for medical services. The code set includes thousands of codes that describe medical procedures, surgeries, diagnostic tests and other services provided in healthcare.  

Comparing CPT and HCPCS

HCPCS (Healthcare Common Procedure Coding System) is a standardized coding system originally developed by the Centers for Medicare and Medicaid (CMS) in 1983 to report supplies, equipment and services that are not covered by CPT codes.  

CPT and HCPCS code sets do have some overlap, as both are used to describe medical procedures and services, they also have their differences as shown in the table below:  

Copyrighted by the AMA  Available in the public domain 
Updated annually by the AMA  Updated quarterly by CMS 
Describe medical procedures and services  Describe equipment, supplies and services not covered by CPT 
Primarily used by private payers  Primarily used by Medicare, Medicaid and other government payers 

CPTII (Current Procedural Terminology – II) is a subset of the HCPCS coding system that describes clinical services and procedure provided to patients. Unlike CPT codes, which describe physician services, CPTII codes are used to report performance measures or clinical quality measures (CQMs) that are related to specific healthcare services provided to patients. CQMs are the measures of healthcare quality that are based on clinical guidelines, such as HEDIS, and standards of care. They are used to evaluate and monitor the delivery of healthcare services to measure the impact of interventions on patient outcomes. They are used to assess individual provider performance and help to identify areas for improvement and to evaluate the quality of care provided.  

Uses for, and Development of, Each Coding System

The codes are used to report on measures such as preventive care, disease management and patient outcomes. By using these codes, healthcare providers and payers can collect and analyze the data on their performance and make informed decisions about how to improve the quality of care provided to their patient population.  

The development and use of standardized coding systems, like the CPT code, have helped to streamline the healthcare billing process, reduce errors and inconsistencies in reporting and improve communication among healthcare providers, payers and other stakeholders in the healthcare system. They have also helped to increase awareness of how treatment plans, supportive services and clinical decision-making are impacting the health of their communities and allowing them to see the gaps and opportunities to make improvements.  

Final Thoughts

In summary, the use of all these code sets is essential for accurate billing, fair reimbursement, quality improvement and medical research. They play a critical role in the healthcare system by ensuring that the services provided to patients are properly documented, tracked and reimbursed.